Friday, January 20, 2012

Can we kill the music business too?

There's a pretty good discussion going on over at Hacker News around YCombinator's request for startups to "Kill Hollywood". Lots of ideas there about how to essentially replace the old guard in Hollywood with new forms of entertainment. Somehow though, it seems that the other big player in the room for your entertainment dollars, the recording industry, has been left out of the discussion. I think the music industry, particularly as it is run by the major recording labels, is a regime in need of change as much as Hollywood. Here's my take on what needs to happen.

In a nutshell, to kill the major label run music industry, startups will need to:

find great music from people who aren't assholes

let people do cool things with that music

let users share what they create

profit!

That might sound easy but there's a lot work of in there, and it's an uphill battle.

Find great music from people who aren't assholes
By assholes, I mean people who will sue you for usingtheirmusic in your startup, which probably makes this first step the hardest. You can't have a great music startup without the music and more than that you need good music.

We've seen sites before where anyone can upload their music and let people play it for free. It's a nice idea and sites like that are a great outlet for musicians. But there's one huge problem - most of the music sucks, and listeners can tell that right away. There are no filters or gatekeepers and that's one thing major labels are very good at. They act as a filter that stops you from having to hear all the out of tune, talent-less wanna be stars who have no idea how bad they really are.

So the startup that wants to disrupt this industry will need to find a source of good music they can use without worry until they are big enough to have the music come to them. Right now, it looks like Soundcloud, with their excellent API, might be that source. There's a lot of high quality, well produced music that mostly independent artists and labels have put there with the purpose of being shared.

Ideally, once big enough, the startup could become the equivalent of a label, in the sense that it would be the first place up and coming artists would submit their music to in the hope of being "discovered". The startup would in turn fulfill the filtering, distribution and publicity needs that labels currently provide.

That would be one big nail in the coffin of the major labels, when artists are bypassing them to submit their music to startups.

Let people do cool things with that music
This is what startups are good at. I'm always astounded by the cool things hackers can do with music. The major label run music industry is bad at this, and has been very slow to adapt to technological change.

Here's an example of their backwards thinking, even when trying to move forward:

I was at first pretty excited to hear that major label EMI was partnering with the cool music API startup, EchoNest. I couldn't believe a major label was making some of their catalog available to developers to put to use building music apps. And then I read the details. If you use their music, EMI will have the power to approve your app, publish it themselves, and take a huge cut of any profit your app makes. Sound familiar? The labels want developers to become their slaves just like artists have always been. It's the only way they know how to operate. No thanks.

So it's up to startups and developers to build cool things with non major label music that lets end users do cool things with non major label music. Let users remix, chop up, speed up, slow down the music. Let them make videos, make radio stations, make ringtones. Let them wear music, let them see music, let them feel music. I am confident we haven't even begun to see the cool things hackers will let us do with music.

And maybe if it's cool enough the majors will come begging to let you include their music too.

Let users share what they create
Letting users share what they create may seem obvious in this day and age, but if there is one thing the music industry hates it's sharing. To them, sharing is the root of all evil and a lot of their money, time and effort has gone into putting an end to it.

Unfortunately, because of the RIAA and their campaigns of suing people, your users will need to be confident that your service is legal and they won't be sued for using it. Parents will want assurances that the site their teenager is using to remix music won't somehow cost them their home.

So make sure it's legal, and then make sure users know its legal.

Let people share what they create without fear of reprisals and they will come running to use your service.

Profit!
Well, this is always the hard part, but it seems to me that if you can get the first three parts to work, then this should follow. Build a compelling product that puts power in the hands of users, not in the hands of the major labels and they will thank you for it. Get them all on your side and some money should follow.

If you've read this far, thanks for your time. I have a lot more to say on this topic but wanted to get some thoughts out there. We're starting to put some of these ideas to work over at songspin.fm. We have a long way to go, but it will be worth it.

15 comments:

wonder who is still listening to North American pop music.. it's all auto-tuned and it all sounds the same.. they got their panties up in a bunch because of piracy? what dumb pirates are actually downloading the stuff? if your sales are down, are you sure people didn't just stop listening to the garbage altogether?

Artists need initial help to rid of the startup fears which sends them in the arms of the enslaving RIAA.Create an open pool of “service providers” that abide by an open contractual agreement securing musical talent with supporting talent.Name it OpenRecordingAlliance.net or something more friendly.Credentialed designers, developers, accountants, advertising skill bands together to create a supporting nucleus for aspiring artists. Affinity, past experience, geography are the free coalescing agents.Artists post their intent, biography and whatever rules require. This in formation is visible to registered users which sign up to help. A minimum number of supporting skills will be required to secure success.The artist will mind the guitar, voice or whatever gift may be. Within a given time, legal paperwork is completed, a website, recordings, accounting, trade marks etc. Timelines and rules are set by the OPA.NET governing body.Contractual agreement expires within few months. Ensuing success is shared, credits given. The team may continue to work together with renewed contract as each party agrees.Details of the agreement and its scope are of course, key to the success of this idea. I believe that given such a platform, many artists, designers, web developers would gladly work together to succeed.The artist only maintains copyright.We open source the music. As it used to be.

James, this is a very good idea. As always, it is important to get a green light from artists them selves. Suggestions:1. Adding 2 or 3 concise, compelling reasons explaining how your project will benefit artists.2. iTunes is similar. If not how is your project different. 3. How is your project better for the consumers and artists than the status quo?4. Define what helpful technology you allude to. I like the idea of technology (chopping, speeding up music). Technology as you say may be a unique thing hackers can offer musicians.Donald Leslie, Moog, Les Paul all used technologyto change the face of music.To say that another techie will change music again is not to far of a stretch.

No, it does not work like that. Either you define your profit model from the beginning or you can forget about proffit. As soon as you start charging, you will want to protect your sales. Thus you become a new music company, who chases piracy.

But really, all of these together still amount to a tiny percentage of the music business. So there is still a long way to go (though soundcloud and bandcamp are both growing at rather high rates, while sales through traditional channels and providers is contracting...).

Also, these companies don't replicate the management, A&R, and marketing functions of the majors. I think you can make a good case that these should be *different* companies then the storage/transfer/sales/distribution, but these companies don't yet exist.

And yeah, clearly copyright reform is needed, though in the meantime voluntary measures like works being licensed in the creative commons can improve things greatly.

i really like the idea, but there are some obstacles in creating such a thing:all good/famous/not-even-famous artists earn at least some money with royalties by registering to copyright enforcing entities.so we really need to guarantee them some money from changing anything.even if they want to do thing different its hard for artists to get out of that system.so we need to help them and create something that is a lot better for them.

I am working daily at trying to kill this 1930's business model with a start up called BR join us http://www.facebook.com/BattleRoulette and any of you coders interested in working on the future of live entertainment hit me up I will respond. Cheers.

"If you use their music, EMI will have the power to approve your app, publish it themselves, and take a huge cut of any profit your app makes. Sound familiar?"Yes. Replace music with platform and EMI with Apple. Problem?

Have you heard of Airborne Music? They're a UK-based startup with a completely different distribution model... remains to be seen if it'll work, but I think it's definitely worth a shot. If you want to check out what an individual artist's page looks like, check this out for example: http://airbornemusic.com/illuminator

The music industry is the low-hanging fruit of this whole effort. They could be replaced in 10 years with a large group companies -- or just artists using new tools -- that find and promote actual talent and treat artists with respect. Musicians should never again be asked to give up their intellectual property rights. It should become the law.

Have you thought about creating this and rather than making it accessible to everyone focusing in an area that has a strong following and perhaps is more prone to be interested in technology like club/techno/electronica? I mean that world is already starting to expand and become into a more indie/hipster scene anyway as well with artists like Flying Lotus, Skrillex, Air France, Delorean, etc. etc. They're all becoming widely accepted by those "trendsetters" the music industry loves to try and impress (lana del rey much?). By focusing on a smaller musical genre/scene and seeing how it bleeds into other's seems like it would work better than just trying to attack the mainstream with a music product for everyone.